Federal Cuts to the Arts No Big Deal

Monday March 6th, 2017   •   Posted by Craig Eyermann at 6:32am PST   •  

The day before his inauguration, The Hill reported on a trial balloon that members of President-elect Donald Trump’s incoming administration were floating about potential spending cuts in the federal government’s budget, in which the amount of the federal government’s spending upon the Corporation of Public Broadcasting, the National Endowment for the Arts (NEA) and the National Endowment for the Humanities (NEH) were targeted for reduction.

At the time, Alexander Bolton of the Washington Post took great exception to a very small portion of the potential spending cuts that had been floated, where the proposals involved realizing the complete privatization the Corporation for Public Broadcasting and zeroing out the federal contributions for both the NEA and NEH.

The Corporation for Public Broadcasting received $445 million in 2016. (It gets additional funding from donors like you.) NEA got $148 million. NEH requested the same. The Congressional Budget Office figures that about $3.9 trillion was spent by the government during the fiscal year.

Bolton continued to narrow his focus on the relative cost to American taxpayers of the National Endowment of the Arts with respect to the size of the U.S. government’s annual spending.

If you were at Thanksgiving and demanded a slice of pecan pie proportionate to 2016 NEA spending relative to the federal budget, you’d end up with a piece of pie that would need to be sliced off with a finely-tuned laser.

What Bolton didn’t consider is the relative size of the benefits that American taxpayers receive from the things the NEA does in spending $148 million each year (actually $131 million, after subtracting the nearly $17 million in salaries paid to some 173 NEA bureaucrats), which has to be compared against the value that the nation’s arts and cultural industrial complex adds to the U.S. economy each year.

According the National Endowment for the Arts itself, just four years ago, the arts and cultural production of Americans contributed $704.2 billion, or $4.2% of GDP, to the U.S. economy.

To be clear, what the NEA is referring to when it cites “arts and cultural production” are activities that include things like the performing arts, museums, motion pictures, sound recording, publishing (including software, such as for video games), sports, et cetera. Many of which are, in fact, multi-billion dollar industries that continuously dedicate enormous resources to developing new products and services, which other businesses subsidize through advertising or other marketing promotions to provide these things at the lowest possible cost to the entire audience of American consumers.

If 100% of the NEA’s entire annual budget made a meaningful contribution to the value added to the U.S. economy by the nation’s arts and cultural production sector, it would account for right around 0.02% of all the other real value that they produce.

Unfortunately, since the NEA’s annual budget represents such a small fraction of the things that the arts and cultural production sector does, much of what it contributes can be considered to be trivial extensions of things that the private sector is already doing without any meaningful assistance from the U.S. government.

For example, private sector concert promoters made a big splash in the news several years ago when they introduced holographic performances by deceased artists like Tupac Shakur at live outdoor concert events. The NEA’s contribution to that technological development involved deciding to retread that same artistic territory by providing $1.7 million to assist the National Comedy Center‘s staging of a hologram performance of a classic scene from the “I Love Lucy” 1950’s television show featuring deceased comedic actress Lucille Ball at the New York state-funded tourist attraction, which is located about 70 miles south of Buffalo.


Thanks to a 2007 study in the National Tax Journal on how the arts industry addressed federal spending cuts enacted in the 1990s, we have a good idea of what would happen to the arts in the United States if the NEA’s budget was entirely eliminated. The private sector would respond to increased fund raising efforts on the part of the affected institutions by taking up a very large share of the slack resulting from any budget cuts, with estimates of the amount of replaced funding that they would be able to obtain ranging between 80 and 100% of their “lost” federal funding on average.

To put the amount of federal funding that we’re talking about into more personal terms, the Washington Post also provides the following estimate of the personal relative cost of the U.S. government’s combined spending on its national endowments for the arts, for the humanities, and for the Corporation for Public Broadcasting with respect to the federal budget.

If you make $50,000 a year, spending the equivalent of what the government spends on these three programs would be like spending less than $10.

So here’s a novel idea. If you enjoy consuming the experiences of the products and services found in performing arts, museums, motion pictures, sound recording, publishing, video games, sporting events, et cetera, and you make $50,000, invest $10 or more during the course of a year above and beyond what you do today on the kind of arts and cultural production that you would like to have more of in your life. Not only can you help completely take over and replace the role of these government agencies in the economy, you can get the greater benefit of knowing that your dollars are going to the kind of arts and cultural production that you value most, and not what some federal government bureaucrat or politician values more than you.

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March 2017